Our backstage pass to Hollywood’s biggest night of the year

The 85th Academy Awards ceremony will bring downtown Los Angeles to a standstill on Feb. 24, as hundreds of limousines carry some of the most famous — and valuable — faces on the planet to the Dolby Theatre in Hollywood. But the event serves a purpose beyond the usual back-slapping: It helps drive film buffs into cinemas during a traditionally slow time of year, says Phil Contrino, editor at Boxoffice.com, a wesite that tracks movie-ticket sales. According to industry data, the summer months typically account for around 40% of annual ticket sales, and the holiday season makes up a sizable chunk of the remainder. “January and February are typically quiet times,” Contrino says.

That’s partly because big-budget blockbusters hit during the summer when kids are off school, he says. Plus, consumers tend to be short on cash in the New Year, and with an adult movie ticket running $8 to $12, depending on the theater, Contrino says, even the most ardent movie fans can be reluctant to shell out.

What’s more, movie audiences year-round may be shrinking: Admissions last year of 1.27 billion — the lowest level since the mid-1990s — were broadly in line with 2011, but came after a 6% decline in 2010, according to Hollywood.com, which compiles box office data. In other words, all those “For Your Consideration” advertisements splashed throughout the industry papers — directed at the voting members of the Academy of Motion Picture Arts and Sciences — are ultimately aimed at driving more consumers into theaters, says Contrino.

2. “…but don’t expect discounts.”

Throughout most of the year, discount bulk movie tickets are regularly offered on daily-deal sites and elsewhere. But come Oscar season, such deals tend to become scarce, experts say. “If movie theaters discounted tickets now, it would defeat the purpose of the biggest promotional event of the year,” says Seth Rabinowitz, a partner at management consultancy Silicon Associates who previously worked for a talent agency in Los Angeles.

“We don’t see any offers specific to Oscar-nominated movies,” says Karen Huynh, analyst at deal-tracking site Dealradar.com. Daily-deal site Groupon, which occasionally offers deals on movies, says it has no plans to offer deals on Oscar-nominated movies. Living Social says it doesn’t have any current offers for movie tickets though it says its coupons are usually redeemable for a few months, so theatergoers could theoretically get discount movie tickets by buying well in advance.

Of course, discounts of any kind are rare in the movie business, although theaters may offer promotions such as reduced rates for kids, students and retirees. If a film doesn’t do well, ticket prices aren’t slashed. The dud simply gets pulled from the theaters. “You can make a movie for $300 million or $3 million, and the ticket price remains the same,” says Jonathan Taplin, director of the University of Southern California’s Annenberg Innovation Lab, an arts and media researcher. “Hollywood is different from all other industries that way.”

Yet, for the hardy, seeing some Oscar nominees for less than full price isn’t impossible: Participating AMC theaters, for instance, offered a one-day, 24-hour pass to watch all nine movies nominated for Best Picture for $60. This year, the Regal Entertainment Group also offered two-day passes for $50 and one-day pass for $30 to see all nine Best Picture nominees.

3. “Pay no attention to rising ticket prices.”

The glitz and glamour of the movie business comes at a price, say experts. As the cost of special effects and movie star contracts continues to soar, so will ticket prices, says USC’s Taplin, who is also a member of the Academy of Motion Picture Arts and Sciences. Experts say the Oscars go a long way toward persuading the audience that winners and nominees are worth the higher price of admission. “Prices will probably continue to rise as they have most years,” Taplin predicts. “It’s the only guaranteed place Hollywood can get money.” Despite broadly flat ticket sales, the movie industry increased ticket revenue by 6% to around $10.8 billion in 2012, helped by rising ticket prices and more expensive 3-D movies, according to Hollywood.com, a news and entertainment website.

The search for new sources of revenue is one of the reasons movies like “Top Gun” and “Star Wars” were recently re-released, he says. Earlier this month, the 1986 Tom Cruise vehicle took in around $3 million at Imax theaters nationwide during its two-week release; it had a limited six-day run to publicize the 3-D Blu-ray release on Feb. 19. That’s small potatoes given that “Texas Chainsaw 3D” has grossed over $34 million in the six weeks since its release. (As is typical for 3-D movies, tickets can cost from $14 to $20, including the 3-D glasses, depending on the movie and the venue.) U.S. ticket prices hit an all-time high in 2012, according to data released by National Association of Theatre Owners; they now stand at $7.96, virtually unchanged from the $7.93 in 2011, but those averages include student and other ticket concessions. Be that as it may, ticket sales currently only make up around one-fifth of a movie’s total revenue, according to the MPAA. The rest is earned from merchandizing, television syndication and DVDs.

4. “Prepare for extravagance.”

The famous Vanity Fair awards party is emulated in homes all over the country. Of the 39 million people expected to watch the 85th Academy Awards, using Nielsen’s 2012 estimate as a barometer, many will do so in large groups who will drink champagne and nibble on Oscar movie-themed appetizers. What you won’t see much of, party planners say, is chicken wings and beer. Oscar parties tend to be more lavish than Super Bowl parties. New York-based celebrity caterer and event planner Andrea Correale has worked for clients who have rented celebrity wax figures for $8,000 each and even one who, last year, paid to have a live Billy Crystal look-a-like entertain the party.

In Reno, Nev., publicist Jen Eastwood (no relation to Clint) spends $500 to $1,500 on her annual Oscar party; she even purchased (rather than renting) a tent, heaters, linens and champagne glasses. For Katie Depres, a Boston-based marketing executive and blogger, “formal attire is a party requirement.” The Oscars are broadcast just weeks after 5 million sports fans upgraded their TV sets for the Super Bowl, so that new technology figures into the Oscar party tab as well. And that doesn’t include the extra money spent by guests on the Oscar pools.

5. “You can thank us for that soda craving.”

Movie buffs sipping champagne all evening may later feel the inexplicable desire for a Coke. Blame it on the $55 million that Coca-Cola has spent on Oscar advertising over the past six years, making it one of the single largest Academy Award sponsors, according to Kantar Media. Diet Coke is the exclusive nonalcoholic beverage sponsor of the Academy Awards. A spokeswoman for Coca-Cola declined to comment on the ad spend, but says the Oscars “is one of a handful of high-impact programs that is considered appointment television.”

Advertisers have spent over $750 million on the Academy Awards telecast over the past decade, and the number of advertisers during the telecast has risen from 13 in 2008 to 21 in 2012, Kantar says. Citigoup, Google, Hulu and MetLife were first-time Oscar advertisers last year. Plus, air time isn’t cheap. This year, a 30-second spot costs around $1.7 million, Kantar says.

And like with the Super Bowl, many people tune in just to see the ads, not necessarily the drawn-out awards ceremony. On the plus side, the Academy Awards ceremony crams less advertising into its telecast than other major TV events: It has an average of 8 to 10 minutes per hour of national commercial messages, versus 13 to 14 minutes per hour for the Super Bowl, according to Kantar Media.

6. “Oscar fever could boost your cable bill.”

It’s not just movie theaters that are trying to benefit from the Oscar buzz — cable companies want in on the action too. According to a survey by CouponCabin.com, a website offering coupons from major retailers, 30% of moviegoers say they watch movies on demand from a cable or satellite provider. Comcast is offering Oscar-nominated movies as they become available from $4.99 to $6.99 per movie. It also has on-demand older Oscar movies for $2.99.

Time Warner is showing previous Oscar winners, like “Forrest Gump,” “Titanic,” “The English Patient” and “Shakespeare in Love,” through March 18. The current crop of Oscar-nominated movies will be available for limited periods: “Life of Pi” from March 12 to July 25 and “Argo” from Feb. 19 to July 18. Although for some movies viewers will have to wait until their theatrical release finishes, with prices starting at $4.99 per movie, each is cheaper than a movie theater ticket.

7. “Product placement isn’t just for movies.”

Selling more movie tickets is only a small part of Oscar night. The pre-Oscar red carpet footage — where glamorous stars are routinely asked by obsequious interviewers “who are you wearing” — is one long commercial for clothes, jewelry and shoes, say some experts. In fact, if a designer can get a star to don a piece from their latest line, it can boost sales more than traditional advertising, says Susan J. Ashbrook, author of “Will Work for Shoes: The Business Behind Red Carpet Product Placement.” “The Oscars are the Super Bowl for fashion,” she adds.

In 2011, for instance, Natalie Portman’s tassel earrings from Tiffany’s repotedly sold out shortly after she walked them down the red carpet, Ashbrook says. (Tiffany did not respond to requests for comment.) And that one appearance was enough to create a trend for cheaper versions under $60 from Ann Taylor, Brooks Brothers and Guess, and more expensive interpretations for over $300 from designers such as Oscar de la Renta and Eddie Borgo. Ashbrook says fashion trends start on celebs on the red carpet and end up on teens on prom night.

Of course, most viewers aren’t going to run out and buy a multithousand-dollar designer dress in the days after the Oscars. But the red carpet raises the profile of a brand. “Designers don’t sell big volume from those dresses,” Ashbrook says. “It’s more about name and brand recognition.” For example, when Scarlett Johansson wears Dolce & Gabbana on the red carpet, people may be more likely to buy the brand’s “The One” perfume (around $90 for a 2.5-ounce bottle), also marketed by Johansson, she says.

8. “The best don’t always win.”

Experts say credit is not always given where it’s due by the Academy’s 6,000-plus lifetime members, an assortment of working artists and professionals — from producers and directors to costume designers and make-up artists. (Notably, a 2012 survey by the Los Angeles Times found that the Academy was 94% caucasian and 77% male, with a median age of 62.) Nominations typically back films that are box-office hits or have a big Hollywood star. Politics, personal popularity and back-scratching among those who invested heavily in certain movies is also at work, Taplin says. The Academy did not respond to requests for comment, but its policy states that members use secret ballots, which are privately tallied by auditing firm PricewaterhouseCoopers.

Moves are afoot to highlight overlooked performers. Last year, the University of Southern California’s Annenberg Innovation Lab launched a project to measure social media sentiment: the Oscar Senti-meter, or “The People’s Oscar,” as Taplin calls it. The project attempted to move beyond pundits’ opinions of who the winners may be, to see which contenders the moviegoers would award the highest accolades in the industry to, Taplin says. Most of the actors listed on the Senti-meter were already household names and, as such, may have had an advantage over lesser-known performers, he says. The Academy’s official policy states that it “aggressively monitors” award campaigning, and it has issued regulations that limit company mailings to members.

Taplin says art films do get recognized by the Academy, but true independent movies that may be a critical hit tend to evade Oscar’s gaze. And money doesn’t always win out over critical success. Films like “Transformers” — a worldwide billion-dollar hit that received a less rapturous reception from critics — will never get nominated because of how much money they make, he says.

9. “We’ve lost the younger generations.”

Oscar just isn’t hip anymore. The median age for the Academy Awards television audience is 52.8, compared with 46.7 a decade ago and 39.9 in 1992, according to Nielsen. After several choppy years of viewing figures, actor and comedian Seth MacFarlane this year will host. The biggest grossing movies, like “Spider-Man” and “Dark Knight Rises,” don’t get prominent Oscar recognition,” says Brad Adgate, senior vice president of research at Horizon Media. “Movies with big nominations are not popular with younger moviegoers,” he says. In 2011, Anne Hathaway and James Franco tried to attract a younger audience, but overall viewership dropped 10% to 37.6 million. Last year, after comedian Eddie Murphy backed out, organizers hoped that Billy Crystal would bring some retro cool to the proceedings. The ceremony drew little more than 39 million viewers, a 4% increase on 2011, according to Nielsen, still far from its all-time highest ratings of 55.2 million in 1998 when “Titanic” won 11 Oscars and became the highest-grossing film ever.

On top of that, there’s a lot riding on making the telecast — and the movies being celebrated — appeal to younger people. Those between ages 12 and 24 make up only 23% of moviegoers according to the MPAA. Kit Yarrow, a professor of psychology and marketing at Golden Gate University in San Francisco and author of “Gen Y: How Tweens, Teens and Twenty-Somethings Are Revolutionizing Retail,” says Hollywood needs to do more to attract younger audiences — given their relatively abundant free leisure time and disposable income. “This generation requires a different kind of courtship and more involvement,” Yarrow says. “It’s harder for old, established products, like the Oscars, to wake up to the need to change.” However, she says, the move toward smartphones and social networking is a good start. Last year, 4 million people visited Oscar.com or used an Oscar app to view the awards. (The Academy of Motion Picture Arts and Sciences did not respond to requests for comment.)

10. “This gold statuette is worth millions.”

There’s a lot of cash riding on the winner of this year’s Best Picture. Take a look at last year’s Best Picture winner, “The Artist.” It enjoyed a 34% bump in revenue after the Academy Awards, when it expanded from 966 theaters to 1,756, eventually grossing nearly $45 million domestically. Not bad for essentially a black-and-white silent film. In 2011, before “The King’s Speech” received a Best Picture nomination, it had earned around $56 million domestically. After its producers clasped that coveted Oscar statuette, however, it went on to gross $100 million in the following months. DVD sales have now brought that total to $140 million, according to BoxOfficeMojo.com.

A Best Picture win at the Academy Awards is practically the best advertising a movie can get, experts say, especially if the studio’s pre-ceremony marketing push is taken into account. In fact, even a nomination can be worth its weight in gold. The average winning movie was made on a $17 million budget and earned $82.5 million at the box office, according to market research company IBISWorld, and more than half of the winners’ box office sales occurred after the Best Picture nomination. (The Oscar statuette itself is gold-plated and worth about $500, according to Go Banking Rates, a financial services website.)

A lot of Oscar-winning movies will only begin to make money after the awards are announced, Contrino says. This year, he says, the French movie “Amour” — which experts say has an outside chance of winning next to “Lincoln” or “Les Miserables” — would enjoy a significant boost to its $3 million domestic gross if it were to win Best Picture. But as the film is still making its way through the nation’s cinema art houses, “Amour” will benefit immensely from exposure during the Oscar telecast even if it doesn’t win anything,” he says.

Mortgage Rates

Powered by

This advertisement is provided by Bankrate, which compiles rate data from more than 4,800 financial institutions. Bankrate is paid by financial institutions whenever users click on display advertisements or on rate table listings enhanced with features like logos, navigation links, and toll free numbers. Dow Jones receives a share of these revenues when users click on a paid placement.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.